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Wednesday, December 02, 2015

RTK: Will Martin Tower Be Replaced By Gas Station?

(Blogger's Note: This analysis appear is today's Bethlehem Press, which also includes a timeline of the back and forth between Ronca and City officials. I am repeating the story here, where it is easier for readers to comment. )

A controversial mixed use ordinance at the 53-acre Martin Tower campus is poised for adoption by Bethlehem City Council later this month, following a review by the Planning Commission. Mayor Bob Donchez and Council President Willie Reynolds have publicly stated that they want to give developer Lew Ronca more flexibility for numerous different uses like destination retail, big boxes and apartment buildings. But documents providedin response to a right-to-know reveal that, despite numerous meetings with city officials since January, Ronca appears to have no idea what he wants to do. Only two things are clear. First, he will demolish the iconic 21-story building that once stood as headquarters to Bethlehem Steel. Second, he will replace this landmark listed on the National Register of Historic Places with a small commercial building, most likely a high end gas station. .

Ronca instrumental in securing CRIZ in Bethlehem

Documents released by Bethlehem reveal that Ronca was instrumental in obtaining a City Revitalization and Investment Zone (CRIZ) designation in Bethlehem. The Martin Tower project is described as the "cornerstone" of Bethlehem's 130-acre CRIZ plan and as "another example of Bethlehem's efforts to create its future from vestiges of Bethlehem Steel's past."

Ronca orchestrated the use of lobbyists Anthony Pugliese and Heather Browne, wife of State Senator and NIZ author Pat Browne, to navigate the treacherous political waters in Harrisburg to secure favorable tax concessions for a closed club of developers that included him, Dennis Benner, Mike Perrucci, J.G. Petrucci, Majestic Realty and the Sands Casino. At the time that Ronca and then Mayor John Callahan were conducting conference calls with these lobbyists, emails reveal that developer Lou Pektor was on the outside looking in. He tried over and over to get a seat at the table, but it was a closed game.

When the CRIZ designation ultimately came in late 2013, Ronca finally had a green light to use state sales and income tax to fuel development at the site. What's more, any attempt to transfer the CRIZ away from Martin Tower to another part of the City would require his assent. He could just sit on the entire tract and do nothing, and the City would have to pay him to move the CRIZ somewhere else.

Ronca Also Beneficiary of $9 Million RACP Grant

Think the CRIZ is enough of an incentive to jump start development? Think again.

In addition to the CRIZ, Ronca has another government concession. It's $9 million in taxpayer dollars to remediate asbestos at the site, as well as add a sprinkler system. Over the summer, Mayor Donhez requested a one-year extension on the site, signing off on a letter that had been prepared in advance by Ronca. This is part of the state Redevelopment Assistance Capital Program (RACP), and was initially obtained by Lou Pektor he was involved in the Martin Tower project. Since this funding stream was approved before the CRIZ, Ronca will be able to take advantage of this state grant as well as use state taxes to pay for construction.

Instead of using $9 million in RACP funds to just remove the asbestos from Martin Tower, he intends to do that and then tear down the building. He will spend $5.1 million on asbestos remediation, $1,75 million for demolition and $1.5 million on regrading. The tower structure is to be replaced by a $4 million commercial building. The state will reimburse $9.075 million of the money spent.

Ronca Wants To Replace Martin Tower With High End Gas Station

This new commercial building will most likely be a high end gas station. Ronca and his business associate, Duane Wagner, began meeting with City officials in earnest concerning a new Office Mixed Use Ordinance in January. In late February, Ronca broached the idea of a high end gas station, possibly a Sheetz, to replace the Martin Tower. He seemed concerned at the time that it might be too close to Interstate 378, but his worries seem to have been answered.

A high end gas station is appealing to Ronca because, as he explained in email exchanges with City officials, it will generate $210,000 annually in state taxes. That money can in turn be used to fuel more CRIZ development.Thus idea was discussed with Mayor Donchez.

According to a timeline Ronca submitted to the state. he was hoping to get the Office Mixed Use Ordinance approved in November. After that, he would present a Master Plan for approval in February and a specific plan to demolish Martin Tower in May. The Tower would tumble in October 2016.

This is completely contrary to redevelopment elsewhere in Bethlehem, where the emphasis has been on adaptive re-use of Bethlehem Steel structures.

What happens to the rest of the site is unknown.

Contacts With City Officials

Ronca and other CRIZ beneficiaries have been major contributor to Mayor Donchez and several Council members. The Right-to-Know request asked for all written communications between these elected officials and Ronca, even phone text messages and emails from their personal accounts. Aside from two emails from Michael Recchiuti, inviting Ronca to campaign fundraisers, nothing indicates that Ronca reminded any elected official of his contributions or that there were any communications at all between Ronca and elected officials, with the exception of meetings with Mayor Donchez to discuss the new zoning proposal.

But Ronca did have frequent contact with City Planning Director Darlene Heller and Department of Community and Development Director Alicia Karner, as several drafts of the new proposal went back and forth.

Finally, after two meetings with the Planning Commission, Heller forwarded the new zoning ordinance to City Council with a memo calling Martin Tower "blighted and obsolete." She claimed the City was being "proactive," but the reality is that this ordinance was inspired by Ronca, who provided the original draft or a mark-up of an existing ordinance to the City on January 20, 2015.

In addition to being the driving force between this new ordinance, Ronca business associate Duane Wagner even went so far as to provide Darlene Heller with "talking points" to answer merchant concerns about the ordinance as fears of a third downtown began to surface. The ordinance went through seven different drafts, and included as many meetings with City Officials, including the Mayor.

Ronca Strategy : Wear the Public Down.

Instead of publicly defending his proposal, or presenting a specific plan of what he intended to do at the 53-acre site. Ronca's strategy was to wear the public down. He failed to appear when the new zoning ordinance was presented to the Planning Commission in July and August, and has been absent at three public hearings concerning these zoning changes.

Let Ronca and his partners choke on their purchase. If they get their way, they will have no money invested and the taxpayer will foot the bill to remove the tower ($9 mill) and probably make money on the demo job. Building on the site will not begin until they have iron clad contracts in hand, again no potential loss of money.

I'm not familiar with this proposed ordinance and what's in it. But based on what I'm reading it seems this is relevant. Smart, better more responsible growth movement is filled with buzzwords. But you can't just stick a label on something where it doesn't apply. Words have meanings and people aren't stupid.

From a general explanation that includes knocking down an existing structure to build a sheetz gas stations paired with big boxes.. No, that doesn't seem like a smart growth project to me.

8:12 AM "this is a highway interchange" - That might be the case. If so leaders have a responsibility to call it that. That's my point. If this is a typical strippy highway interchange commercial project don't characterize it a mixed use project. Many examples in the Valley where advocates of projects apply "smart growth" terms that just don't apply in an effort to soften and sell to the public. Real pet peeve of mine.

It isn't a mixed use development if it contains a sheet gas station anywhere close to the normal sheetz template. A sheetz gas station is a use that would normally be separated and buffered. For good reasons. They are car centric, noisy, bright.

I tend to think "use" is less important than built form. That's the problem with classic Euclidean codes. Focus is on arbitrary lists of uses. I think you can have almost any use as part of a good mixed use project but the built form has to be compatible. Problem with a sheetz, wawa or most chain gas station is reluctance to deviate from the template. I've never seen a sheetz that would be mixed use appropriate.

I would need to read the ordinance. I'm just basing this off what I read in the paper.

It keeps being mentioned that the developers have suggested putting a Sheetz in this location. Does Sheetz itself have anything to say about that or did someone just decide on their own that one would fit there. It's possible that Sheetz has no interest in building another one considering there is already one down the road.

"It keeps being mentioned that the developers have suggested putting a Sheetz in this location. Does Sheetz itself have anything to say about that or did someone just decide on their own that one would fit there. It's possible that Sheetz has no interest in building another one considering there is already one down the road."

Whether Sheetz has been contracted or ends up being the gas station is unknown. I uploaded the RTK and you can look thru everything. This is from Ronca and Wagner emails. There is no indication Sheetz was contacted.

To those who say tear down the tower, it is going to gcost a lot more than the $1.5 MM projected. The Steel spared no expense in putting that up, and taking it down is going to cost a lot more money. Tearing the building down is NOT smart growth, no matter how much you hate the steel or the many draftsmen and middle managers who worked there. I have seen nothing in the RTK indicating that RONCa got any hard numbers on cost of demolition v. cost of rehab. He never made one effort to recruit Guardian, which is putting up a new building in Hanover. That would have been a perfect fit. There has been no attempt at adaptive re-use at all. Before tearing this building down, tghise who really support smart growth should study Martin Tower and should ask Ronca whether he has bothered ever making any attempt to market it.

Martin Tower is a symbol of Bethlehem. Instead of working to tear it down, we should be trying to use it as an asset to get more business to locate here. Even providing it to a major coronation for little or no cost.

The jobs it would bring would offset any money lost by not selling it at market value.

It's hard to believe that eyesore has historic significance. It's hideous. Demolition will certainly be expensive, but likely less so than tax handouts for developers at the expense of taxpayers and business owners who haven't been picked as winners by politicians.

Tgat tax handout has already happened. Also the cost of demolition is going to be a lot more than $1.5 million.Ronca will want more money. There needs to be an independent analysis of costs of demo v. Cost of rehab. Ronca needs to explain why he never even reach d out to Guardian and why he never sought tenants. He does not even belong to LVEDC. Then, after that, we need to ask whether it really makes sense to replace the former HQs of BS with a gas station.

There are superpumper gas stations everywhere. Martin Tower is to Bethlehem like the PPL Building is to Allentown.

Talen Energy is looking for a new home. It could use some of the building and sub-let the rest perhaps? Martin Tower is in a lot nicer area than downtown Allentown and there is plenty of free parking for the employees. Yes, MT would need updating and renovation, but that would be cheaper than building a new building or leasing another one.

Jamie, I don't profess to be an expert, but heard someone speak at two of the Council meetings who IS an expert on these larger buildings, and in several states. He believes that Martin Tower is by no means unsavable and that it would be attractive to many tenants. Guardian could have located its entire office there, and was never contacted. Talen is certainly good for a few floors. I don't believe Council has looked at this question closely enough, and is relying on information supplied by Ronca that seems to be suspect.

Thank you for your reporting on this issue. What bothers me is the deception and exclusion of the public through this whole process. As you have documented from the RTK, the developers have been actively involved with the city officials reviewing and revising and providing talking points to the officials while the downtown merchants were not accorded similar access even though they sought to have input. Deception took place by omission and commission: At the October 6th city council meeting (see minutes, page 8) Reynolds specifically insists on clarifying that it is the administration that brought this [rezoning]forward specifically disputing that the property owner or the developer was involved. Minutes state, "One thing that has come up as well is that it is the feeling that the property owner or developer is bringing this forward, but it is the Administration. President Reynolds just wanted to make that clear; it was Mayor Donchez and his staff that brought this forward." So this was an intentional effort to mislead the public about the involvement of the developers. Combined with the text messages you published indicating that at the very time of this meeting the developer was texting Ms. Karner and was even in the hall outside the meeting compounds the obvious effort to deceive the public. Further, the apparently intentional effort to wear the public down with an exhaustive presentation by Ms. Heller shows not only disdain for the public's rightful role in this process, but I think clearly impedes the public's ability to participate in their government. In addition, in subsequent council meetings they maintained that there was no plan for development, but your RTK reveals that in fact there has been a plan all along. Ms. Heller, Ms. Karner and Mr. Reynolds, in conspiring to collaborate with the developers, misleading the public about their involvement and intentionally acting in such a way to reduce the public's participation have failed in their responsibility to the community. They have clearly violated the city's code of ethics. The question is what can be done about this?

Thank you for your analysis Barbara. I think you are spot on. This reminds me of thee worst of the Callahan years. In those times developers basically wrote policy. No wonder when he ran for Executive his own city only gave him half their votes.

This Martin tower nonsense is right at the feet of the mayor and Karner. They are responsible for the tactics and problems the city faces.

Remember, the state provided a $9 million grant that was specifically directed to cover the costs of the cleanup of asbestos for a renovation and other renovation costs. I could understand that renovation would not make sense without that grant, but it should make sense with that grant.

A big question is whether Governor Wolf will allow the conversion of that $9 million grant from covering renovation costs to covering demolition costs. It is supposed to be directly tied to job creation. I believe the Governor has that power to say yes or no. I believe he can cancel the grant if the money will not be used for the purpose for which it was approved, which was a renovation. Also, the grant can be cancelled if the work is not completed during 2016.

The asbestos needs to be addressed with millions of dollars of expenses whether the building is demolished or renovated.

Here's the criz law. It specifically says you can't use cigarette taxes in the Criz (unlike Allentown's NIZ). It doesn't list gasoline taxes as an eligible tax for diversion, so I believe gasoline taxes cannot be used by a developer.